Terra Luna Update: Things Got Worse
May 17, 2022 2022-05-17 15:59Terra Luna Update: Things Got Worse
Terra Luna Update: Things Got Worse
Terra Luna remains a hot topic in the cryptocurrency world as it continues to lose value, investors, and confidence in the project. So it begs the question, is there still a future for the project, or is Terra Luna officially dead?
What is Happening Now
Do Kwon, founder of Terra Luna, seemingly gave up on the project after its fork proposal of the current Luna ecosystem came out and the plans to start anew became apparent. If this proceeds, would entirely forfeit its failed project and focus on building “Decentralized Finance (DeFi) Applications.”
However, this comes with huge backlash, including Pershing Square Capital Founder Bill Ackman, who said in a tweet, “it sounds just like a crypto version of a pyramid scheme,” he proceeded to liken protocols designed like the UST as a sophisticated version of a Ponzi Scheme. He added, “Investors were promised 20% returns backed by a token whose value is driven only by demand from new investors in the token. There is no fundamental underlying business.”
On the other hand, the CEO of Binance, Changpeng Zhao, said in a statement that he was “very disappointed” with how Do Kwon handled the collapse of LUNA and UST. He then smashed Terra’s Founder on his plan to fork Terra, stating that the plan “won’t work.” He also added that Binance tried on multiple occasions to reach Kwon and the team behind Terra; however, he said “so far, we have not gotten any positive response or much response at all.”
Terra’s Plan to Reimburse its Investors
There has been a proposal that is growing with community support. Essentially, the plan pointed out that 99.6% of Terra’s investors are small investors, and thus, the plan is to reimburse 100% of these small investors. This represents 236,000 “poorest” UST holders. The plan is getting massive support and traction in the cryptocurrency community, including notable names such as Ethereum’s Founder, Vitalik Buterin, and the Binance founder himself.
On the other hand, Luna Foundation Guard, a proprietary organization created by Luna Terra, said yesterday, Monday, that its reserves had been almost depleted trying to stabilize its UST stablecoin. However, it vowed to compensate remaining users of UST with the leftover they have left. The details about this are not clear as of today, but the organization made a follow-up statement that it will focus on reimbursing the smallest holders.
Price Analysis
UST/USD Chart
UST went down as low as 95% in a span of five days since its collapse on the 9th of May. Currently, it is trading between 0.10 to 0.11 cents, down by around 90% from its supposed $1 peg price.
LUNA/USD Chart
In a span of the same period, LUNA wiped out almost all of its value. From a high of close to $120 to today’s price of less than 0.0002 Cents. In fact, if you invested $1 Million, it is worth merely about 3 dollars today.